This is a transcribed video for CS183B, the YC startup class at Stanford.

This is a reading for Kevin Hale's talk. Kevin is a founder of Wufoo and a partner at Y Combinator.

The transcript hasn't been cleaned up.

Ben: Georgia Tech rejected me. I was like, "Screw you, guys. I'm just going to go to UGA." I always sound like A-hole when I say this but if you're working for me, you're a creative person, it's not my job to make you happy. If you search for the word boredom in our app, the whole screen turns into an asteroids game.

This money is like a pain in the ass to count. Are you guys having problem?

Speaker 2: Today, we have Ben Chestnut and he is the co-founder of MailChimp, a little company here in Atlanta and I'm going to read his bio real quick. He started college as a Physics major at UGA. He discovered Industrial Design. Then, he transferred to Georgia Tech and he got a degree in Industrial Design. He started technical Rocket Science Group, a web development agency in 2001. MailChimp was a side project of the Rocket Science Group to help their client send email. It eventually became their sole focus and now, they have 1.2 million users worldwide.

Without further advocacy, let's give it up to Ben Chestnut.

Ben: This is exciting for me because for the last 10 years of my life, pretty much I only got invited to speak about email marketing so finally, I get to talk about something else. I love email but I have nothing more to say about email. It's like I've been talking about this like if you have something interesting to say, send an email. Otherwise, don’t send anything. It's really that simple.

I actually tell employees spread rumors in the industry that I'm a germaphobe and I won't travel and that way, people would stop asking me to talk about email marketing. Ten years, I've had all this thoughts and they've been stuck up here because no one has asked me to talk about them. Then Tina invited me. She's, "You can talk about anything you want." This is like just to warn you. This is 10 years of stuff that have been tormenting me. I hope I can do this here.

What I want to talk about is controlled chaos and the maximization of the entropic states as applied to steam engines and creative environments. An insanely laborious title and probably the most uncreative title ever for Creative Mornings but running a creative environment and a creative office is really hard work. It's unbelievable hard work and that's kind of what I want to convey in this. This is going to be really chaotic lecture by the way just to set your expectation.

As we got closer to you today, I sent an email to Tina kind of like this and she said, "You know, don’t worry about it. Tell people your story. Tell them how you got here." Point A to point B, how did I get to MailChimp. I'll give you a little background. I grew up in a creative household. My brother was a painter and also a musician. He played the guitar and he fiddled with electronics and my sisters were into graphic arts.

They were always making collages and stuff. My mother was an aspiring chef. My father was an aspiring writer but also a computer programmer. We were just always making stuff at home and I was into cartooning. I thought I wanted to be a cartoonist when I grew up. I would take … I would steal

post-it notes from my sisters and my brother and make little cartoons and I'll take them to school and show them off, flip them on the bus and the kids would gather around like, "Oh that so cool."

Then I started to sell them. I turned it into a business. I would stay up late at night and I should have been doing my math homework but I would make this cartoons and sell them for 50 cents which is so stupid I … all night and I … 50 cents. Really bad at math.

I would take this to school and they love them. They're like little stick figures that run across the screen, bouncing balls and people loved it and they wanted more so I would make a car come in and run over the people. They're like, "Man, that's awesome. Do more, more, more." I had to make jets come in and drop bombs on the cars and the cars would explode and little tires would bounce around on the screen and they wanted more, more.

I found myself I was 10 or something and I was already dealing with A-hole clients, really demanding. I was just 10 and I couldn’t wake up in the morning. I didn’t want to get on the bus anymore. I got out of it. I just totally got out of the business. My dad, he bought us an AMStrad PC and I guess he wanted me to be a computer programmer. He said, "You know, want to learn this stuff?" I was like, "No. No. Numbers, no. No. No."

He didn’t push me. He said, "That's fine." I didn’t touch it for a while and went to RadioShack 1 day and he takes this box off the shelf. He's like, "What do you think, huh? Huh?" I think it was called Paint Deluxe Pro. I tried to go back and find this. It looks like one of the first programs from Electronic Arts which is like a gaming company now but it's Paint Deluxe but all I remember is on the cover was this giant tiger. It was a huge tiger face and I was like, "Tiger." I was like, "I want to learn that."

He bought it. It was hundreds of dollars and he never spent that much money. He's just, "Let's get it." It was 5 floppy disks, you had to load this like the 5 inch kind like and there was no hard drive. It's in the RAM. You have to load this in order to start the program. I totally fell in love with this. I was drawing on the computer all the time and I knew that's what I wanted to do with the rest of my life, just draw things on computers.

There was no name for this profession. It was new. There were no [inaudible 00:06:22] commercials like computer graphics or anything. I had no idea so I just figured that I had to be an engineer like engineers got to play with computers and draw stuff. I went all through high school taking drafting classes just thinking, "I got to be an engineer so I'll take drafting." Then, it was time to apply to college and Georgia Tech rejected me.

The School of Mechanical Engineering was like, "No. Your Math is really bad." I was like, "Screw you, guys. I'm just going to UGA and I'm going to study Physics." Two years, I studied Physics and it was really ... I looked like him. I was very depressed. It was like, "All right. I know how the world works now. What I'm going to do with that?" My sister, she was working in a creative company. She was at Hallmark actually designing cards. Her friends heard about me and sent me a care package in the mai

l and I remember getting this. It was a college catalogue for art center in Pasadena. You guys know about this school out there?

I got in and I was like, "Wow!" I learned about this profession of Industrial Design. I was like, "Man, this is awesome." The suits and … He [inaudible 00:07:45] he's always got like a cigarette with his pictures. These guys get to play with computers. They draw stuff and there's no math. Not that much so I was like, "I want to do that now." Pasadena is extremely expensive that school so my dad was like, "No. No. No. No."

It turns out, yeah, Georgia Tech has a school of Industrial Design and I remember driving from Athens to Atlanta to talk to the director. It was Bill Bullock at the time. I don’t know if anybody knows him but he looked at my portfolio. I drew 2 pictures and he said, "You know, you've got potential. It's obvious you haven’t been doing this so if you were to apply today, we would say no but if you apply to the Georgia Tech School of Physics …" like nobody wants to learn Physics, "Go to Physics, they'll let you in and then you just transfer." He's like, "If you transfer, no one looks at your portfolio. You can just get in, you know."

I was like, "Really?" These designers, they're really sneaky people. I applied and they actually let me in. I was like, "Suckers." I got in and I was really, really in the product design. I love product design. I would probably be designing cars today but I suck with X-ACTO knives. These are the tool of the devil. They're cylindrical. You guys use these things? They spin in your hand. They're not right. I said, "Screw this. I'm going to get into Web Design." It's like … and … With Web Design it's like clean, you don’t have to sand anything or cut anything. It's just like pixels. It's nice clean computers.

Then so it's like 1 thing led to another and I ended up at MailChimp. Yeah. Now, I'm like the CEO of a software company and like that's … I'm the happiest I've ever been. It's the most challenging and stressful I've ever been but I'm the happiest and I didn’t start off looking to be the CEO of a company. I wanted to be a cartoonist and I think that's my first lesson is you always hear people say, "Do what you love. Do what you love." It's partly true but if it's business, if you start a business doing what you love, it will kill you. It will kill your passion.

If you like to bake and you start a bakery, you will have baking very soon. I love what you do better because it's wherever you're at just be good at it, embrace it, love it, and eventually success will find you. I actually believe that but you don’t forget your passion. You never forget it. After all these years, we actually made a coloring book. We're a software company and we made this coloring book and it's called love what you do and it's all about our little mascot, Freddie, doing little things in life but really loving it just finding joy.

I just love this message and we printed out thousands of these things and we just send them out to customers randomly and they send back pictures of their kids coloring at the laundry mat and they're all bored and it's just … very touching for me. This is what I also want to do anyway, mission

accomplished.

It got featured on this blog called Swiss Miss, some little design thing and it … I don’t know, Tina, if you notice but the editor of [inaudible 00:11:17] Company apparently loves Swiss Miss and she made a writer contact me and do a story on us. That was neat. It was all about creative cultures and how we give you permission to be creative in the company and they talked about the whacky things that go on in the company and I'm like I don’t know if you guys use MailChimp or but we had this mascot Freddie which just does random things while you're building your newsletter like, "Why I'm I smiling. I'm not wearing any pants?"

People love it and he says lots of other random stuff that our customers have sent us and we started to get some designers saying, "You know, I love this but my clients, you know, he's got a stick up his butt. Can you turn this off in any way? Is there a button?" We made a button. Let's see. Yeah. It's called "Party Pooper Mode." You just activate that and the monkey goes away. They love it and they snap tweak picks of it. It's like a secret with us in the designers.

There are all kinds of little touches in the app like when you hit the send button, just underneath it, we say this is your moment of glory. That's really … I can't take credit for any of this stuff. All I can say is I tried to make an environment where people on the team can just play around this. I discovered this stuff along with our customers. I will send emails like, "Who did this? This is cool." You'll see people tweet all about this. They just love these tiny touches.

If you search … I hope you can see this. If you search for the word boredom in our app, the whole screen turns into an asteroids game. It's this crazy like Easter eggs in the app and we don’t say like I don’t say, "Go do an Easter egg." I think I ask the guys like the CSS is way too bloated. It's 500 K. Knock it down. The guy started researching efficient coding methods and stuff and somewhere in the process, they found this game maybe as an exercise in efficient coding or something like that so they shaved down hundreds and hundreds of K and then they added this game back in because they had room. Snuck it back in.

That's where creativity comes from. We used to spend a lot of money on Google Ad words and we still do in case Google is watching. We still spend money but we launched a premium program a little while ago and that's … It really, really ramped up our user base and we could save a lot money from Google and we looked at the money that we were spending over there. We said, "You know, we could pocket it or let's maybe invest in our customers."

We started making these T-shirts and we'll ship them all over the world and it's like a nice surprise when customers like graduate from free to paid. You win a T-shirt and we'll ship it to you and we're getting photos back from all over like this fancy places that I hope to be able to travel to one day. We're starting to get sightings like, "Hey, I saw you on TV." We'll get stuff like

this. This is some guy on Hawaiian TV, I think.

This is neat. Then like this is a print ad for some gym apparently and like that guy is wearing a Freddie T-shirt. It's kind of cool and that's MC Hammer. He's not wearing the shirt but like over there, that guy is. Close enough. I love that. We make these knitted hats and we just shipped this out randomly as well and our customers post pictures of this. They love this stuff and naturally, they started putting them on dogs and we would retweet this and then, of course, the cat people wanted something so we had to start making cat hats.

It's actually like a friend of a friend of a family member in Thailand that knits this like on one of the street markets and that was like … I think she's probably super rich out there because we buy thousands of these things every month and like … I remember writing the email like people were demanding cat hats so … It's like, "This is going to sound weird but can you make this for cats?" They wrote back like in 5 minutes like, "Yes. Send us the measurements for an American cat." They're not obese.

We made a bunch of this and we sent them out and we get … Cats don’t like hats. That's one freaking out. That gave us an idea like all of this like randomness, it starts giving us idea is we made an iPhone app called "Pyow!" Yes, actually, thank you. We're into cats for a little while and we're like, "Hey, let's make Pyow and we'll make like laser shoot out of his eyes because this is like a red laser app, it scans QR codes for our customers who wanted like send coupons and stuff.

Of course, this was like, "Wow! That's kind of neat." We need to make like cat shaped hats as well. In our office, I love like if you say, "Can you hand me a cat hat?" "Which one like the monkey shaped ones for cats or the cat shaped ones for dogs and humans?" You have to be specific when you say cat hats at MailChimp.

People see stuff like this in our company and they see articles and stuff and the ask me like, "What's the formula? What's the formula for running a creative company?" I was like, "Is it that simple?" I never know the answer. It's such a weird question. You're like, "How do you have a creative company," because I think companies are legal entities. They're not creative. They're just pieces of paper. It's these people. You're totally missing then point. People want to be creative.

I wanted to share what I learned about humans. This is while I was designing refrigerators in Iowa. While I was a Industrial Design student, I actually interned, I think it was '96 like wherever … When the Olympics were in Atlanta, I was in Iowa, like I'm never where the action is. I was out in the cornfields designing refrigerators in this in-house design studio and the designers were awesome people and the product managers that they were work with were awesome people. I learned a lot about business and managing business and focus groups and all that stuff.

When the 2 groups had to get together, it was pure hell. It was … The passive-aggressive tension in the room was just crazy and I was just like

a stupid intern but even I could tell, "Man, these guys hate each other." I never knew why but years later, I'm piecing things together and I understand now. They would secretly buy these Japanese and Korean refrigerators and ship them in and dissect them and look at them and they'd say, "Ooh, ahh. Look, it's got these floral prints on them. they've got curves …" and this is '96 so like curves were new.

They're like, "Wow, curves." They didn’t beep. They sang like the birds would chirp and they would sing music and we're like, "Man, we want to do that." The whole company was tooled. The factories were tool to make white sheet metal boxes. You could white, glossy white, off-white, textured white, or cream. That's all we could do. It was incredibly frustrating to get to the point where they could do something beautiful. They're doing beautiful stuff now but it would be like 3 or 4 years. The designers and the managers, they all hated each other because they just couldn’t get anything creative done. Really, really frustrating.

My takeaway was humans really want to create lots of cool stuff and they want to see other people using cool stuff. That's all they want in life. If you can create a business that takes advantage of this, you might have a creative company so to speak. The thing is you have to set up a business to take advantage of this and most businesses they're set up in a weird way. They make a fundamental mistake somewhere along the way. I thought I'd explain it.

This is part of the 10 years of pent-up frustration about business. Here's an example. An entrepreneur has an idea usually. He wants to start a company. A business is like the steam machine like you don’t know how this works. You start up a business. You're like, "Oh, if I tweak this knob, I think money comes out."

If I adjust the screw or like maybe make the pulley or something tighter like more money will come out. That's the first couple of years and then after a little while, you're like, "Wait a minute. Wait a minute. Wait a minute." Two knobs. What happens then like, "Holy shit. Wow. ..." Then, you're like, "Wow, man. I kind of get this stuff. This is kind of cool." Now, I'm going to start thinking big like Richard Branson big. You start learning about key performance indicators like my KPIs are all like knobs. I'm like him but knobs on top of knobs and I've got knobs down here and then like bam.

That's usually what happens and this is where things begin to shake with the company like, "All right. This money is like a pain in the ass to count." Do you guys have that problem like it's ... Pain in the ass, right? It's like everywhere. You need a manager to help you organize and stack this stuff because that's what managers do. They organize and they create order. Managers are good. I'm a manager. You need managers. They create order. You need that. The thing is ... This is not where things go wrong. Things go wrong when that original entrepreneur, the creative guy, says,

"You know what? I deserve a break. I'm going to delegate now. The business is running itself. I can sort of like step back a little bit. Hands off."

That's where things go wrong. They're like, "I'm going to take up like extreme sex surfing or something, you know." I don’t know. I don’t know what that is but I want to do that. He's out there like living it up. That's what business people do. You're like, "You deserve a break. You've been working for 10 years trying to make that stupid money machine print something and you deserve a break, right, so you're going to be hands off. You're going to delegate." I hate that word delegation. I think it's BS but you're out there.

The thing is, your managers back at the office like, "What do I do with this thing?" He didn’t leave a manual. I don’t operate this stuff. I just protect so I'm going to hire robots and they're going to guard it. That's what I do. I protect and defend business and they're going to need guns and dirt bikes and if you have guns and dirt bikes, you need lawyers and lawyers, they need copy machines and shedders and everybody needs to sit down and we need label printers because people take you chairs and they mix them all up. You need cameras to watch all those bastards because they will steal your stuff. You end up with way to much law and order.

That's what ... Managers do that. It's a good thing. You need this but when it gets too much, it can get really, really, really dangerous for your business. I just learned key note like transitions and effects. It's like ... I apologize but I'm going to do this. Before you know it, your whole company is thinking like managers. You're not all managers but you're thinking like managers. You're defending the money machine that you made 10 years ago. No one's making new machines. No one's looking to improve it. You're just defending, defending against competition, whatever. You're just in defense mode and even worse, the creative people at the bottom, they're like, "Wow! The only way to move up in this company is to become a manager or think like a manager."

That's where things really start to end. Too much order is really horrible, really horrible. You got to balance it out with disorder and chaos. Before you get into chaos, this is what I remember from physics at UGA, entropy is the study of waste and disorder. It was discovered by I think a French scientist. Are there any like Physics majors in here? Anybody that actually knows this because ... All right. Good, so I can make shit up.

It was a French scientist who came up with this. He was looking at steam engines and saying, "Wow, man." That's my French accent. "You put potential energy like fuel into this machine and kinetic energy comes out the other side like useful work but somewhere in the middle, there's all these waste, the smoke. It just ... Where does it come from? It's like nature so weird like I'm going to call it entropy. No matter what in nature, you're going to get

entropy, this chaos, this disorder. I'm going to label it with like S because E would be too obvious so I'm going to use S." S stands for entropy. Q is heat. T is temperature or ... I went to UGA so get off my back.

Nature, what I got out of this nature, nature loves chaos. Nature needs chaos. You can have something really nice in order. This is really my takeaway from entropy is you can have a nice orderly studio like studio [inaudible 00:25:37] like nice and clean and white with little red accents but if you want work to get done, you're going to have to let humans in and humans like human nature, they're going to turn it into a pigsty. It is inevitable and that's just nature and I believe that is the very essence of the second law of thermodynamics.

Nature, it's just a part of nature, chaos. You need to get used to it but the thing is managers hate disorder. They don’t like this entropy stuff. It's inefficient. It ruins their sorting. If they had their way, S, entropy would be 0 and I believe the way that the equations work out is without S, you don’t get Q and Q is part of the equation for work and ... Basically, no chaos, no work, not output. They have their way. There'll be no pigsties which means no pigs. No pigs, no bacon. No bacon, no Baco Bits. We need chaos.

Chaos is good. You have to embrace chaos. I think my job as a manager of a creative kind of company and creative people is to find ways to create chaos. Little controlled chaos, not like, I don’t slam employees with chairs. Nothing like, "Ooh yeah." Nothing like that.

I want to talk about the little ways that I try to create chaos in the company. This is a really big idea and I didn’t have time to put text on this slide. It's ironic. This is like I think innovation and creativity comes from just assembling pieces from other stuff in weird ways. You're like ... I try to tell people, "Don’t worry about big ideas. Just keep making the stuff." Build little things. Build prototypes. Sketch this. You want to learn a new programming language, go ahead but don’t take a 2-year course. Just learn a little bit and make something. You got 2 weeks to do it. Two weeks is the ideal timeline at least for me.

After 2 weeks, I don’t want to hear you talking about it anymore. You keep it fast-paced and you're just making junk. It feels like just parts and that's what I tell people all the time like put it in the parts bin. You might launch it. It might have nothing to do with email marketing, nothing to do with MailChimp. Doesn’t help us one bit with the business but just save it because we will use it one day.

Then, you want to avoid meetings. You want to let people stay and work on their stuff and you need meetings every once in a while but you keep it to a minimum so people can work on stuff but then, I always call myself like a

little bumblebee like I buzz around from desk to desk and I ask people like, "What are you working on? What are you working on? What are you working on?"

I never praise people like, "Oh, that's cool," or anything. I just say, "What are you working on? Okay. What are you working on?" I just remember it because I think my job is to go around and say, "Oh, you're working on this but you need a logo like, oh, like Erin over there designed a logo and he doesn't have an app to give it to so like you guys should connect." This is hard work. I could just say, "You know, delegate. You guys go have a meeting and like focus on 2 projects." This is much more hard work but you just have to deal with it. You don’t delegate the creativity away. You deal with it. It is difficult, time consuming.

I don’t feel like I'm doing my job if I'm not buzzing around like a bumblebee. If you're lucky, you can put together these pieces in unique ways. You guys have probably seen this poster. You find creative ways of assembling these pieces and like if you have good managers, they'll take it from this level to something that you can sell. We have a guy in our company called Neo. He just loves it when it's time ... when the creatives like put together their stuff, he comes in and he's like, "All right. Are you ready to make money out of this stuff?" He'll turn into something like this.

One of the reasons I was so stressed is I wasted a month. I didn’t want to come up here and describe myself as a bumblebee. It felt unmanly like flowers. I spent a month ordering guerilla warfare books and art of war and I was like, "Try to learn about this tactics," like I thought that wouldn’t be the topic or the theme. It didn’t work. It was ... I think the FBI is just watching me now because I bought all these books. I just went back to bumblebees and for a minute, I was like maybe like the Transformer Bumblebee. He's awesome but I give up. I'm just not ... That's me. That's me.

I'm a bumblebee. I'm going around. I'm connecting these random chaotic ideasm right, and you're just keeping it fast-paced, make people keep making things. I wanted to show you how this happens at our company. This is ... He's a programmer, Jessie. He doesn’t shave. He lets his hair grow until he's done with the project and then he shaves so we know when he's working on something and when he's done with something. He grows and then, he was ready to shave and our video guy, Josh, he's like, "Can we film you like when you shave?" He's like, "Whatever." It's kind of random silly stuff and so he films it and they thread it backwards. Nothing. No rocket science there but whatever. We post it at the [inaudible 00:31:11] or something and customers got a chuckle and no big deal.

People think this is like creative culture. No. That's not ... That's a piece. This is like a part here. This is work because later on, our creative director starts thinking like, "Whoa. You know, he kind of looks like this Viking terminator

like robot thing, right?" He starts like getting into Vikings all of a sudden. Ron was talking about Vikings and I was like, "Shut up about Vikings." He was like, "We got to make like an app called Enforcerator, but it's … Dude it says, Enfroceator. He spelled it right. Eventually, he got it right. He's sketching Vikings. He's just obsessed with Vikings for a while.

It really goes nowhere but he's sketching swords and skulls and stuff and it turns out Chad, our lead engineer upstairs, is working on something called alter ego and it's a 2-factor security app. He doesn’t have a logo. He's like, "Maybe the design geniuses can come up with something," and he's like, "Hey, we have a sword." We got this done. The whole project was done in about 2 weeks. We launched this thing and what's really beautiful, the whole human thing. You want to build something cool and you want to see other people use it. We built this in 2 weeks and made it free for our 1.2 million users. We get to see it in action.

Version 1 that we knocked out in 2 weeks, it didn’t ... It was a mobile web app, not a native iPhone or Android app. You have to log in to your browser on your phone. It was okay. We just want to get it live though. It turns out we have ... We have a mobile lab 2 doors down from Chad and I told him about this. I don’t say, "Hey, we're working on something. Can you help?" I'd like to say, "We just launched something. Can you help?" I think that's important. We just launched something now. Can you go back and help us build a native app and they were actually wanting to tinker with Android apps. They were into iPhone but they wanted to ...

This was such a simple little app so we actually built an ... I got Josh to film this thing in action. We got to play with the sword more. That's all it does. It's so simple but it was so easy ...

Speaker 3: Flawless kill.

Ben: it's like that Lightsaber game where when you swing this thing around, it sounds like sword fighting. We're hoping that someday, somebody plays with this thing and moves it and I'm like, "Whoa. Wait a minute. You know, Lightsaber." Be in their office swinging the thing around. We were done in 2 weeks and so you have time to work in Easter eggs like that like bring some creative fun stuff into the app.

It's almost like you go back to that money machine in business and the average guy would say, "I want a creative company. I get what I want. You creative people, start being creative. Give me more useful output and stop it with that smoke stuff. It's annoying." In our company, we say, "Whoa, look at that smoke. Whoa! Can you make a shape or something with that? Oh my God. Look at that awesome smoke, guys. Can you do something like ... Whoa! Shh ... Give me more."

The creative people are looking at you like, "He's really into unicorns." They're like making unicorns for you like this guy is a weirdo but mean time, a byproduct is

innovation and money. You just flip the equation around. Instead of focusing on the work, you focus on the entropy or the chaos and you get a byproduct. Hope that makes some kind of sense.

Speaker2: That was awesome. Thank you. [crosstalk 00:35:19] We're going to do a real quick Q&A. We're a little over so maybe like 3 or 4 questions.

Ben: Yeah. I'm pretty smart. I took 10 years to figure this up. The question was, "Did I figure this out right away?" Yeah. No. Ten years, hard work, pure agony. Hence the picture I think at the beginning. If you look at that, that was ... That scared me. Yeah. It's like grueling.

Yeah, like the spark, like the light bulb moment. There wasn't. It was like we were busy doing client work and it was just like hassle and clients needed something. Honestly like when we were working at Cox Interactive newspaper company, we saw a news article that Blue Mountain like an e-greetings site from ages ago, they were bought for 600 million and my friend and I, we were like, "Dude, let's do that." We made an e-greeting site and I drew the cards and he programmed the delivery engine. It went nowhere like friends and family like, "You guys are idiots." Then, we just sat there like parts sittings in the parts bin. We knew we'd use it 1 day. We kept it alive and a client many years later said, "You know, can you do this email marketing for us, these newsletters?"

We started doing it for them. It was all manual and they kept asking for it. We built it into a web app and said, "Leave us alone. Just go log in and do it yourself." We left it. They kept annoying us with the invoices like $200." [inaudible 00:37:01] "Come on." We gave our credit card system so they could just pay their and we left it alone for 5 years and we went back and we're like, "Jesus. It's making more money than us." There was no leap or anything. It's like while you're in there doing your work hustling, that pops up.

Yeah. It's an excellent question. It's like ... If I can repeat it, it's, "How do you get back to the numbers when you're working on happiness all the time? Can you really turn that into money?" The part about that's hard for me to convey, I tried it and I took out the slides. It's, "I don’t care about your happiness." A lot of people worry about that like they think that I'm here doing this fun stuff for happiness and I always sound like an A-hole when I say this. If you're working for me, you're creative person, it's not my job to make you happy. We have a business. It's hard work. We're making money but I'm going to give you opportunities to be creative by keeping it fast-paced and making you do random stuff. You're going to be creative and if you're a creative person, then you'll be happy indirectly.

I'm not ever focused on happiness. I don’t ... You are a robot. I plug you in and you make me money. No. That's ... Tiger to chimp. That's a good question. I don’t have any idea. I know we got chimp from ... We had to pull an all-nighter and it was during the Super Bowl and like we really resented that working for a

client and there was no YouTube like people were posting to some advertising site all the commercials. We would work and then pull up the site and watch Super Bowl commercials and they were all chimps. We were like, "People like chimps."

Speaker 4: Earlier, you were talking about love what you do versus doing what you love. [Inaudible 00:38:58] and maybe your last answer about not caring my happiness [inaudible 00:39:01] but is it your contention that for a lot of creatives, you do start a business based on something that they love that they should go out and find something to do that would not necessarily be what they love but is able to finance what it is that they love. Does that make sense?

Ben: Yeah.

Speaker 4: For instance, if you start a business as a bakery and you end up hating baking. Now, you're like, "Okay. I hate baking." This is something that my wife is doing [inaudible 00:39:31] photographer. It's like all the pains of [inaudible 00:39:33] a photography business is making her hate photography. I'm like, "Sweetheart, you know, you should just go back to you doing what you love." What's your take on that, Ben? Is it better to then in the real world find something that can finance what you love whether or not it's a business that you love doing and then spend your free time doing what you love? Does that make sense?

Ben: Yeah, it does. It's hard to answer. One thing you can just get a manager and to help with a lot of that stuff that you hate so much, managers are really good for that kind of stuff and they love that actually. They're doing what they love. Yeah. It's a really hard one to answer. I feel like I never got to do exactly what I love but I still try to be really good and I ended up loving whatever ... wherever … I had a stint as a banner ad designer for 2 years. I loved it. I was pretty good at it. Eventually, all of these things add up to some kind of knowledge where in the end, you will be able to go back and do your passion but while you're working on business, business really isn't about that passion.

There's a book that like weird businesses sales e-book but it's called the e-myth. I don’t know if anybody's read this but it talks a lot about this sort of thing where, it's your passion, you start a business and it becomes a chore and you hate it. They're ways around it. I'd say just be prepared to lose the passion for a few years but keep it. It will come back later. You might end up with a business that does email and not cartoony but you still get your passion done.

Would I have done MailChimp sooner? Yeah. I sometimes think about that but the way that the economy work out when we started it, it was right after 9/11

and there was ... like a real estate fallout before that and right before that was like the dot com bust and we call ourselves cockroaches like no matter what happens, we can survive. That kind of pain really helped us get stronger. I don’t know if I would go back and change that. I see lot people now like, "Man, they start up in good times and like their business jus ramps up," and when you see them in hard times, it's really, really rough for them. We're like, "Pssh. That's every day." Cockroaches. Thank you, all.

Chamath: I want some intro music from Ignacio. Where is Ignacio? First of all I was playing poker until really late last night so I’m a little rough around the edges. I got my slides to you at midnight. I was at the table doing the slides. I’ll just start with a little bit about myself. I’m actually going to give you a somewhat cynical view of this entire space of what it means to be a growth hacker. So don't be offended.

A little bit about me. I think Aaron just touched upon this. Actually, I graduated from EE and in the midst of trying to find my way I ended up working at an investment bank for a year trading derivatives. It was probably the most insipid idiotic use of my time. The biggest thing that I realized was that bankers are smart enough to be greedy but not smart enough to be useful.

So I quit and I applied to all these jobs online and I got one at Winamp accidentally. We actually build something really cool. But the thing that I learned at Winamp, and all of this ties together so I apologize the rambling, but we actually had one of the most important and early consumer platforms available, which was this set of abstractions that we had build to allow people to customize our product. You build skins, you build plugins, and what it actually did was start to refine my understanding of how when you develop things that appeal to specific sets of consumers you start to get this operational leverage in your product.

We were seven people. The things that we did as a seven-person group were pretty impressive back in the day. 100 million users is not as impressive as it is today as it was back then when the internet was a lot smaller but it was still quite an interesting product and really defined a lot of the characteristics of how I actually approached things when I was at Facebook. Winamp was acquired by AOL. At AOL I bumbled along into a bunch of different jobs and ultimately was able to a run AIM and ICQ which was the instant messaging product.

The takeaway from that were two things. One, and I'll get to this a little bit later, most people at most companies are really shit. That was manifested in large degree at AOL. I learned all the things not to do, one, and that was probably 90 percent of my learnings to be quite honest with you. Then 10 percent was reinforcing some things that I learned at Winamp which is really about core product value. What it means is create a real connection with someone. I think now we all euphemistically call it the “Aha” moment with the consumer. But also the power of how these communication networks when they develop create real entrenched usage and scale, and how these things can just dramatically accelerate adoption and engagement.

Then lastly I spent a bunch of time at Facebook. The Facebook story is actually really interesting and I'll tell it sort of interleave it as I go through the rest of slides. I spend most of my time investing and playing poker to be quite honest with you. Some of the big ones that I was fairly large stakeholder in Playdom, Yammmer which we sold for about two billion dollars in combined value. I’m a fairly large investor in Box, Palantir, and a bunch of very small companies now, some of which where I act as a cofounder, some of which I don’t.

A lot of people like to tell every return that they have on their blog. I don't blog or use the Twitter, but the track record here is pretty good. I'm a dad, I have two kids, another one on the way in January. I play a lot of poker and I own the Warriors. That’s what I mean, baller for all of you. For all you people don't use your open dictionary, just use this one, okay?

All right, so let’s talk about growth. Everyone asks me because this is like the topic du jour, it's what everyone wants to know, it’s like what was the secret, it's almost as if we’re the NSA and we've developed something and nobody knows, or some secret backroom negotiations between us and government. It's none of that shit. We did three really obvious brain dead things and the reality was we lacked enough self-awareness and ego to frankly just continue to do these very simple things over and over and over again, repetitively, monotonously to a point where every time we used to see things move in one direction or another we would either keep doing them or stop doing them and not second guess ourselves.

I tell people, “You know, look, we actually just looked at a lot of data, we measured a lot of stuff, we tested a lot of stuff, and we tried a lot of stuff.” Now that masks over a lot of more nuanced understanding but at an extremely high level that's really what we did. What's shocking to me is when I see a lot of products out there it’s unbelievable to me that people are trying to shroud products in this veneer of complexity that makes themselves seem like so good and so smart and, “I’m this fucking hipster,” and, “I’m riding the Muni in San Francisco,” and, “Look at my Oolong green tea that I bought organically,” and, “Look at these rip tight skinny jeans that I bought.”

It’s like you’ve got to get over yourself. Measure some shit. Try some shit. Test some more shit. Throw the stuff that doesn't work. It's not that complicated. I see app after app after app and I get inundated. When I download and I try them I’m like, “Did you even spend eight seconds using your own product?” It’s unbelievable the lack of dogfooding that happens.

So most people when they think about growth they think it’s this convoluted thing where you're trying to generate these extra normal behaviors in people. That's not what it's about. What it's about is a very simple elegant understanding of product value and consumer behavior. When you shroud yourself and all the bullshit veneer, and this is the single biggest problem in the valley today, you will miss the mark.

The problem is we're in this massive long tail where you've had these seminal huge successes occur and now you have all these people who have two choices and they’re extremely difficult choices. Choice number one is you do what you think is right, independent of what the external feedback tells you. Choice number two is you do what you read about, and what you get credit for, and what people tell you is interesting. That second-class of things destroys products and it destroys people's ability to build something interesting.

I

t doesn't matter how good you are at your job if that specific set of values isn’t imbued in what you're building. You will fail and it doesn't matter. Right now that is the one most important thing that if you’re going to leave away with this is just don't believe the hype and the bullshit that we're in right now.

How do we do this? We didn’t even come up with this framework. A guy worked for me. I’m not going to say who it is because I was literally like nine times I was going to fire this numb skull. Once he came to me and said, “Chamath at eBay we had this framework.” EBay, this is 2000. I’m like, “EBay, eBay sucks. What can I learn from eBay?” He said, “Well, we had this framework we used at eBay.” We tweaked it a little bit and what I realized was, “Oh my gosh, you know, there's this massive amount of complexity when expressed in simplicity can be extremely useful.”

The tweaks that we made, eBay is a different product and eBay now is a wonderful company doing really, really well. What? Come on, it’s doing really well. Was we created a framework in which we applied those three very simple principles of measuring, testing, and trying things. We said, “Okay, the biggest risk that we had is we’d alienate the people that trust us today and use the product.” When you alienate someone what happens is it's actually not palatable generally in top level metrics but there's just this extremely long tail.

Anecdotally you can look at companies, and not to pick on HP as an example, but you look at HP. You’re signaling me? 10 minutes? I have 10 minutes left? Jesus Christ, okay. You ask yourself. I know Meg Whitman. She's actually a really great CEO. So what happened? Well, there's no product innovation right now and we have to figure out where their growth comes from. When you trace that thing back it's a decision that was made maybe five or six years ago when it was all about cutting costs and optimizing for structure revenue. So you realize, “Okay, well that's the long tail. That's how long it takes these things to manifest.”

Similarly my biggest fear was we spam our users and we trick them and it will alienate these people. You won't see it today but you'll see in three years from now or four years from now, and it accelerates when you compound that with a competitor who actually builds a better product that doesn't alienate people. The most important thing that we did against our framework was I teased out virality and said you cannot do it. Don't talk about it. Don't touch it. I don't want you to give me any product plans that revolve around this idea of virality. I don’t want to hear it.

What I want to hear about is the three most difficult and hard problems that any consumer product has to deal with. How to get people on the front door? How to get them to an “Aha” moment as quickly as possible? And then how do you deliver core product value as often as possible? After all of that is said and done only then can you propose to me how you are going to get people to get more people. That single decision about not even allowing the conversation to revolve around this last thing in my opinion was the most important thing that we did.

When I look again in the landscape, things that scale understand that principle, whether it's explicitly or intuitively, and things that don't and also things that have this amazingly steep rise and then fall off a cliff and there are really visible examples of that today also ignore that principle. It’s the discipline to not optimize for the thing that gives you the shortest and most immediate ROI because that is never the sustainable thing that allows you to build something useful.

So when you boil that all up the most important two high-level takeaways that we had and after all of this stuff was we got to eliminate ego. Ego manifests itself every day. I talked about it earlier. It's the ego of basically living a lifestyle and a vision and like a Twitter stream than it is actually like living the life of an entrepreneur building good product and trying to deliver core product value. That takes ego, meaning you have to be comfortable not being rewarded in the short term.

Then the second is to invalidate all the lore. In any given product there's always people who strut around the office like, “You know, I have this gut feeling. It's all about gut feeling.” Most people with gut feeling are fucking morons. They don't know what they're talking about. They just don't. If we lived on gut feeling you can look at what happens when you live on gut feeling. Look at the financial markets, look at how government works, look at how all of these industries that are completely broken. Gut feel is not useful because most people can't predict correctly. We know this.

One of the most important things that we did was just invalidate all of the lore. As much as we didn't do stuff all we did was disprove all of the random anecdotal nonsense that filtered around the company. “Well I think it's this, and people are using it because of that, and I want do this.” It's like, “Where did you pull that out of?” You know where they pulled it out of. Again, you want to do it, to go back and reinforce a sense of ego.

A lot of people don't have a culture within a company that allows these two things to happen. If you can't be extremely clinical and extremely unemotionally detached from the thing that you're building you will make these massive mistakes and things won't grow because you don't understand what's happened.

It takes a really special type of person to not believe the bullshit, and an even more special person to not conflate luck and skill. You have to be, if you're in this type of job in my opinion, relatively cynical. You can be confident. Fuck, you can be arrogant, it doesn’t really matter. But you can't believe your own BS, because when you do you start to compound these massively structural mistakes that again don't expose core product value and then don't allow real engagement and real product value to emerge. You don't listen to consumers because you think it's all about your gut. You don't bother doing any of the traditional straightforward obvious things that would allow you to answer very straightforward obvious questions, and you lose yourself.

Most people unfortunately just don't know what they're talking about. I hate this letter. This letter is the dumbest letter in the alphabet. Y

ou people are doing more when you focus on this to ruin the internet for the entire human race. Don't talk about this anymore. Just stop. Talk about being in the weeds and not understanding what you're doing. There's no context when you talk about this. None whatsoever. You are spammers, and spamming is pathetic, and it ruins the experience. Don't do it.

We never talked about this once. It never came up once. I didn’t have some little guy tickling the ivories on his little Excel spreadsheet, telling me what k values were. Tell me how I’m acquiring people, tell me how we're doing getting them into their “Aha” moment, and tell me core engagement.

Don't give me these low-level abstractions that allow you to validate, get short term results in ROI that don't mean anything. Don't focus on things that destroy long term value. Don't give me stuff that allows you to trick yourself into thinking you know what you're talking about. I'd rather you say you don’t know and I'd rather us to figure stuff out together.

What I don't want to have happen is a culture where you take these short term things, you start working on it in the absence of context, and you have these meteoric rises and what you have is massive turn fall off and everyone's looking around with their hands in the pockets thinking, “Well, what just happened. I thought I was doing a really great job.” You're not doing a really great job. You optimized a variable. Now there maybe somebody on your team that should be doing that, but they should be doing that in the context of something much more important. So you destroy a lot of value when you abstract away that high-level goal to something so ridiculously stupid.

I’m raining on everybody's parade today. Core product value is really allusive and most products don’t have any. I actually fundamentally believe that. But I also believe that most products can have some value. So when you put those two things together, again you go back to the discipline of do you really know what your building and why? Do you really understand how to marry things that maybe non intuitive for people, but really are the important things that people need?

I remember when we were launching in Asia. We created a team. The history of Facebook just very quickly. I started Facebook. My team launched Facebook platform, huge success. Then we do this big deal with Microsoft, we raise a huge round. At the tail end of that around it’s like, “Oh, we're going to launch a bunch of ad products to validate this valuation, and we're going to do all this stuff.” My team goes out and we built three products.

Again, talk about conflating luck and skill. I had all these people, all of our best guys working on this product with me which we called Socialize and [Beak 17:15]. Then we had another thing doing sponsored stories, and then we had another team focused on an online self-service ad product. Most of the resources in mindshare, none of the resources in mindshare. Eight people our best engineers, product managers two people.

Fast-forward to today, all of the revenue, billions of dollars, scaling inordinately, lawsuits. FTC suing us. People telling me on the New York Times I lied about how cross-site scripting worked. I’m not going to lie about cross-site scripting to the New York Times. New York Times, okay, guy, I mean really? That’s I’m going to lie to you guys about? So stupid. It just goes to show you at that point we were seeing this what looked like monotonically negative growth and we're like, “Oh my god, what's happening?” That’s like 25, 30 million people. We came up with this idea, “Okay, we're going to focus on growth.” We went created a team.

As part of that we said, “We're going to internationalize, we're going to launch, and we're just going to go everywhere all over the world.” Again, we dogfooded our own product and we used Facebook platform to create this crowdsourcing translation which was really successful. But long story short we get to Japan, Korea, and it's a constant refrain. I go around the valley. I talk to some folks who have done this before, the guys at Yahoo, the guys at Google, the guys at eBay, just to get a sense of how did you think about it. All these people had the same answer. “Well, we take these MBA's who really want to live on an expat package and we send them out there.” You're just like, “Okay, well that’s not the right answer.”

First thing we did was we hired only native people in those native markets. I had these guys trying to be, “I have an MBA from Harvard. You know, I really want to spend time.” I’m like, “Get the fuck out of my office. Go to ba.com buy a ticket, get out of my face. You're not going to travel on the company dime.”

But you hire all these people natively. We had this amazing guy that we hired in Japan. [Inaudible 19:11] said, “You know, it's really important to actually have specific elements of the profile be different because in Japan the culture dynamic is different.” We said, “Well, what does that mean to you?” He said, “Well maybe it means you know, putting your blood type on the profile.” You're like, “That makes no sense.”

But it makes no sense to us. But it makes sense to him. So we developed this flexibility where were like, “Okay, well, maybe the connections we’re trying to make in that market are a little too allusive.” This product that worked here just didn't have any context here. You would say, “Well, Facebook has clear product value,” but in Japan at the time it didn’t.

So having the courage to reset and redefine what it means in any given market again takes a lot of courage. We did it, and now it's massively scaling. Then all of the sudden the light bulb goes off and you’re like, “Oh my gosh, it's like we don't know what we don't know.” In every single market people react differently, they behave differently, they speak different languages. Guess what, Spanish is not Spanish. Maybe they know that. Five minutes. I got it. I’m on it.

The point is even when you think something works it probably doesn't work for everyone, and finding a framework that allows you to actually restructure and reorganize the

things that you're doing to expose value in different ways to different people in different situations is an extremely important thing. Again, it goes back to how do you live in a world where you’re willing to redefine and reset the things that are independent of what the short term feedback loop is telling you. It’s a very difficult proposition.

We knew we were going to beat MySpace when we had 45 million users. They had 115 million. We just knew. We used to just like, “That was not what we celebrated.” We celebrated at 45 million. It was like a high five. We’re like, “All right, let's get back to work.” The reason was because we had started to do enough things right where we could just see now we understood what we're doing. After all the testing, all the iterating, all of this stuff, you know what the single biggest thing we realized? Get any individual to seven friends in 10 days. That was it. You want a keystone? That was our keystone. There's not much more complexity than that.

There’s an entire team now, hundreds of people that have helped ramp this product to a billion users based on that one simple rule. So if you were looking for a lot of complexity I couldn’t give it to you. But we were able to reframe the entire experience around that one simple premise, a very simple elegant statement of what it was to both capture core product value, to define what it meant to be able to onboard into a product that allowed you to communicate, to get into a network, to find density, and then to basically iterate around that.

Then what we did at that company was we talked about nothing else. Every Q&A, every all hands nothing was spoken about other than this. Monetization didn't really come up. Platform came up but again in a secondary or tertiary context. But it was the single sole focus. But because we had defined it in this very elegant way that expressed it as a function of product value it was something that everyone could intrinsically wrap their arms around.

Again another reason why focusing on abstracting growth down to these low-level things is not right. The person that runs growth on any team has to be strategic and capable enough to engage on the core strategy of the product. Because then you allow yourself to up level the conversation and have it become the most important framework in which you organized an entire company, how equity is given, how expenses are generated, how things are focused on, who gets hired, who gets fired.

But when you understand core product value and then you could basically pivot around it and create these loops that expose that over and over and over again this becomes the most important and obvious thing to do. In the few companies that I help now with this context, when they do that and when it's the CEO or when it’s the cofounder who are living in that world and living in this context they've consistently systematically every single one has been successful, every single one of them.

I've also meet a lot of people who ask all these questions. They’re like, “Hey, I’d love to really …” I meet them and they’re kind of d-bags. They're like way too quantish and way too passive aggressive and

a little agro. It reminds me of something that's actually again a lot more important than the short term ability for people to focus on short term results, which is in this battle between culture and capability culture wins every time. What you value is really what you achieve. So when you see these companies again today that had these massive apexes like rocket ship growth and now some are public and now are going through just unbelievable wrenching, gut-wrenching change, negative spiraling turn downwards, what you realize is that's not a growth problem, although it seems numerically a growth problem. What that is is a product value and culture problem.

When you're focused on again K K K K K K K. Well, not KKK but you get the point. Another reason why K sucks, right? I mean use it three times you're racist, like Jesus. But the point is that's the type of stop that always comes back and it gets you. To short term optimization it never works. You have to work backwards from what is the thing that people are here to do, what is the “Aha” moment that they want? Why cannot they give that to them as fast as possible? Measuring that in days is unrealistic. Measuring it in hours is unrealistic. Measuring it in minutes is necessary but not sufficient. But like, “How do you get that to seconds? How do you get that to hundreds of milliseconds?” That's how you win.

If you even can’t understand what the thing does optimizing all of this stuff over time I think it just creates these really bad crappy companies that all they do is just spam and destroy the internet for everybody else.

To this end this is really what I want to leave you with, which is you probably expected a bunch of formulas and stuff. You have to really understand this. Go back to that first slide, detached, egoless, focused on what's important, not living the hype, not trying to follow some lifestyle, but doing what you think is important, focusing on core value, ruthlessly prioritizing, and getting people who believe in these things. These are the values that we originally wrote in terms of how we recruit.

Again, it may seem like a crazy thing but for all the CEOs here all of you people should be writing this down. This is how you should recruit. It worked for us. I give this to every single company I invest in. It works for most of them. These are things that in my mind are so obvious, blindingly glaringly obvious. People make mistakes around these things all the time.

A very high IQ, self-explanatory, a strong sense of purpose are people that will not buckle under short term pressure, a relentless focus on success just so competitive that you will do whatever it takes to win, aggressive and competitive people who always respect the person but constantly challenge the idea, a high quality bar that borders on perfectionism, just nothing is ever good, you win, something improves by 10 basis points, now it needs to improve by 20 basis points, now it needs to improve by a percent. That living in that world is just a really great dynamic. People who are comfortable taking something that works and saying it doesn't work here unless just reset start again. It just takes a lot of courage.

When that guy came to me Japan and said, “Hey, I think we need to introduce a blood type,” or our team in Korea came with a bunch of different ideas, or our team in India came up with this really clever way of engaging with Facebook over a phone, you have to be willing to take yourself out of your own biases and find people who are willing to come up with things that again are unconventional, another reason why you can't live in the bubble that is the valley.

There are too many problems and too many products that are focused on solving the needs of the one percent of the one percent that live here. The reality is there are seven billion people in the world. Most have never even used the PC. Most are coming straight into a world of phones. They’re living in entirely different context, they have completely different socio-economic paradigms, and you have to be able to be sensitive enough to empathize with where they're coming from.

High integrity I think speaks for itself. It's really easy to focus on short term results. I just don't think there's enough of the long term thinking, being able to take some arrows along the way in the short term because you're trying to build something for the long term, and having a culture and set of values where that’s rewarded.

A perfect example of this is LinkedIn. Reid Hoffman is an extremely good friend of mine. That is an unbelievable company, built over 10 years 11 years of just working, working, working. Friendster comes out of nowhere. We didn't panic. MySpace comes out of nowhere. We didn't panic. Facebook came out of nowhere. We didn’t panic. Just built a great product, we just kept working and working, did not take the short easy way out. You have to respect that because when those guys win they win and they win in scale and they win for a long time.

Surround yourself with good people seems obvious but I see a lot of people who are just not comfortable recruiting people that are better than them. The best thing that I did was recruit four people to my team. My original growth team was James Wang, who was the engineering lead on Facebook platform, Naomi Gleit who was the most tenured employee at Facebook and one of our best product managers, Alex Schultz who is this unbelievable crazy growth guy, and Javier Olivan who ran International for me, and Blake Ross who’s the product manager and also founded FireFox. All of these guys were dramatically better than I was. All I did was enable a framework and create discipline, and they all thrived. The great thing when I left was didn’t miss a beat. That’s really, really a good sign.

Then the last thing is cares about building real value over perception. I like Oolong green tea as much as the next guy. It doesn't make anything happen. I like skinny jeans too, more on girls than guys but whatever. It doesn’t mean anything. Right now we're living in a world where you can get distracted by things that don't matter and the superficiality of how you think things should be done versus the things that need to get done. That takes a lot of courage.

I think my time is up. Thank you. I’m happy to take questions.

Speaker 2: We have a few minutes for questions. We're trying our new approach here of Tweeting questions. One of the first ones we have is what was it about Instagram that made it worth one billion dollars to Facebook?

Chamath: I'll give you my opinion. Again, as a person that's not involved but was there. Again, when you talk about core product value at Facebook one of the key things that it got right or it understood was the connectivity around, you being able to associate your friends in social situations. The simplest manifestation of that was in photos. When we launched our photo feature it literally was just explosive growth. Here it is where in many ways it is the atomic unit of how Facebook gets organized. As much as people are in atomic units it's almost even more important in the sense that it’s even more element ...

All that is great. Facebook is generating billions and billions of photos a day. All of a sudden along comes this company who does the equivalent thing in a slightly different paradigm, a looser privacy model, but all on mobile, and in a context where people enjoy consuming the content as much as they enjoy consuming the photos on Facebook.

From my perspective is both defensive and offensive. From the defensive perspective it locks in that core tenant of behavior and product value that it’s essential and the element of building blocks on which everything else on Facebook is built on top of. Offensively it gets you into a place where now you have this flanker strategy where you have your main product getting more and more usage and getting more and more entrenched and creating this fertile ground all over the world on phones, and you have this unbelievable product specific application that does the same thing. Now you both can go and thrive.

But it was a combination in my opinion of the offensive capability of what it gave Facebook as a tool in its arsenal and defensively protecting its core element that if all of the sudden that behavior seeded someplace else and photo activities started to be generated and stayed in another environment I think it's very problematic for Facebook. Or would’ve been, but I don't think is it.

Speaker 2: All right, actually anyone else with a new tweet question? Everyone's busy quoting you Chamath so lots of good quotes today.

Chamath: I don’t use the Twitter but I'll make sure …

Speaker 2: We have time for one more if someone wants to … We’re waiting for an update here.

Audience: [Inaudible 33:14]

Chamath: Well it actually … No, that that's exactly right. So it started with invalidating lore. We had all of these anecdotes about how people thought the side worked, and part of me, it’s just the cynical part of me which is like I just like proving people wrong, especially when I know they don’t know what they're talking about. For the first six months it was like we were just going to instrument something and just prove people wrong because the best thing is what they do is a shut up. Then actually the next time they speak they try to know what they're talking about, which generally culturally is just a very good thing.

In that process we’re like, “Oh my gosh, there's these weird things that are happening.” You rinse and repeat through all these cohorts and you're like, “Why did these people get into a certain space and are now fully engaged and ramped-up and have these vibrant networks, and these people didn’t?” We just tried enough things where we were able to back into that axiom being the definitive thing that defined how things work for us. But for you it's going to be different. But it started.

I mean if I have to give you a framework it would probably be you’ve got to start with a broad cross-section of engaged users and when you work backwards from each of those and you are smart enough and clever enough to really figure out the different pathways in which they got to that place you can probably tease out what those simple things are, and then hopefully, I think most products are structured this way, you can then path people, more and more of those people into those same clip flows that allow them to get to that state.

But again it starts with looking at an engaged user, not just thinking about how many emails can I send and how do I trick everyone to click on a select dollar and not unselected the selected dollar. No offence, we did that too, but I mean we did that after we figured that shit out.

Speaker 2: Okay we’ll take one last question.

Audience: [Inaudible 35:14]

Chamath: Look, the best thing that happened is I'm not American, I'm Canadian. But even I’m not even really Canadian. Well, I am Canadian but I was born in Sri Lanka. I like, I love America and everything that is given to me, but I'm pretty cynical about the imperialistic nonsense of a lot of Americans and how Americans treat their place in the world to be quite honest with you.

My mental worldview I think was one where that combined with the feedback that I got from all these big companies like, “Well, you know, I have this really great, you know, MBA, JD guy that, you know,” and it's just like, he was like, “Well, how is this whitey going to fucking figure out Korea?” No offense but Korea is going to figure out Korea before. You know what I'm saying? This guy is, “Hey, guys, we’re coming here to take over.” It’s like, “Really? That's crazy. That’s just absolutely crazy.” I was just like, “Let’s just hire some really smart awesome young Korean lady,” and she's kicking ass. Then it’s like, “Let’s do the same thing in Japan, let’s do the same thing in Brazil, let’s do the same thing …” It's not complicated. That’s not so hard, and then just listen to them and let them try.

We had culture fortunately of experimenting and trying at ton of stuff and we celebrated failure more than we really celebrated success. We would celebrate these massive landmark milestones, 100 million, 250 million, 500 million, and even one billion, but one billion was like how do I call [inaudible 36:44].

The growth team had a dinner here at Madera. We all got together, the original team and had a quiet celebration. We are more interested in just trying stuff and learning. Then it was just a matter of having

different people willing to try different stuff in their own markets and then us being able to give them a framework where we said, “Look, 99 percent of things can’t change but you have this one percent flexibility and if you need more justify it.” That was a good interplay. But it's was just part of my worldview. America's great but there's a lot of great people and a lot of great countries too.

Audience: [Inaudible 37:22]

Chamath: I think those frameworks, the great thing is we had to build all of our stuff ourselves. You don’t have to do that anymore. For you guys like even something as simple as like … Our ability to AB test was just a convoluted mess. For you it’s like [inaudible 37:48]. You can’t even you do it yourself just go use optimizing. Or now there's like 19,000 gazillion Hadoop companies and Hive companies out there. There was none when we were doing this stuff. We were rolling our own stuff constantly. We just had a lot of delays that you don’t have to suffer from.

That abstraction allows you to free up resources that you can allocate in different places. But again, it comes back to the discipline of like is the senior manager of the company fixated on a goal and then giving flexibility to someone who has the political capital and the patience and the resolve to get there, and then the ability to question and understand really what's happening in their product?

The other thing is a lot of this credit goes to Zuck because he managed the board and all of the people around so that it's like we're doing this. Do you know what I’m saying? Sometimes it's like … We had a very functional useful board. A lot of times boards can maybe distract CEOs as well. “Well focus on this and focus on that.” Then they come down they shout for the mountain tops, “Hey, we’re going to do this.” Then when it gets filtered down to an individual person what they hear is, “KKK KKK.” I think that's where you lose your stride.

Speaker 2: All right, thank you guys. Thank you Chamath. Thank you. A round of applause.

On Consciousness

Douglas R. Hofstadter

I often name this as my favorite book, but I’ve never actually finished it! An exploration of consciousness, told in a very engaging way. However, it’s 1000 pages and there is also a lot of math, growing progressively more advanced, which combined to prevent me from being able to find the back cover.

On Being Human

Wonderful introduction to secular ethics and to the Dalai Lama, who spends a great deal of his time studying all western fields of knowledge (esp. neuroscience recently) and reconciling them with his own beliefs.

I read this in high school and was enthralled. I read it again more recently and with a lot more of a background in standard philosophy and still found it quite compelling. Answers the question “What is Quality?”

A fascinating exploration of statistics and biases from an expert. It has become effectively required reading for Asana PMs. As an aside, the List of cognitive biases on Wikipedia is probably my favorite article.

We keep copies of this on the Asana bookshelf and recommend it to all new hires. Rosenberg details a very effective communication style and points out some of the common traps that lead most people to impasses and defensiveness in disagreements.

Miscellaneous

I have struggled a lot with lower back pain. After reading this book, I struggled less. His theories are far reaching and quite-possibly quackery, but I found them compelling on many fronts. Aaron Iba also endorses him in detail here.

This could have been titled “How Money Corrupts Food.” If you don’t know about the industrial food system and you’re not a vegan, you are probably living inconsistently with your own values. Though still a meat eater, I dramatically changed my eating habits after reading this and Asana only sources from farms that have humane practices, like Marin Sun Farms.